Taiwan Dollar Set to Replace Yuan as Asia’s Top Funding Currency
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The Taiwan dollar is on the verge of overtaking the yuan as Asia’s best carry-trade target given its lower risk of interest-rate and currency volatility.
A strategy of borrowing the island’s currency to invest in higher-yielding alternatives has generated the second-highest return over the past month among Asian currencies behind the yuan, based on the Sharpe ratio that measures risk-adjusted relative returns.